CA Tax Preparer Standard to go National

Tax season is one of the most stressful times of the year and filing our taxes is definitely one of the most important financial transactions we'll do. So, in who's hands do we entrust our most delicate and important personal information? Well, that the question the IRS Commissioner wants answered. Except in the state of CA, anyone, anywhere, regardless of training and expertise can charge you to complete your tax return. Doesn't make much sense, so Doug Shulman, IRS Commissioner, has called for a comprehensive review of the paid tax return preparer industry. The general requirements to prepare federal tax returns and get paid will look much like the regulatory laws that CA has had in place since 1996 in order to prepare a California state tax return.


Those requirements include significant training and the passing of a basic competency test; as well as 10-15 hours of continuing education annually. Then you will register with a national database where people can lodge complaints and also check your record. Additionally, all preparers will be subject to compliance checks to ensure that the preparer is following the rules. Of course, CPA's, attorneys, and enrolled IRS agents will still be exempt and are considered competent by way of their profession and prior training.


I find it interesting that attorneys are exempt, mainly because, while I've personally prepared taxes in law school, a majority of attorneys never had that experience. And most probably will never even prepare their own taxes. However, I guess if we can be trusted to research the rules, laws, and procedure in every other area of law, taxes should be no different. Just make sure your malpractice insurance is paid up!


And no worries paid tax preparers who don't live in CA; until your state catches up with the times, you can still prepare state tax returns.